Washington: China is seeking to "stabilize and improve" its relations with India in an effort to balance perceived improvement in Indo-US ties, the Pentagon said.

Highlighting this "threat" perception - threat to China because of improved Indo-US relations - is a recent article by a People's Liberation Army academic who asserted that the US "intention to use India to contain China goes without saying", the Pentagon said in its latest annual report to Congress on Chinese military power.

The report is mandated under the fiscal 2000 National Defence Authorization Act.

At the same time, it said, China is encouraging both New Delhi and Islamabad to reduce tensions while preserving its "historical strategic partnership with Pakistan".

China's leaders, said the report, maintain that the situation along China's periphery is basically peaceful.

However, as the 2002 Chinese Defence White Paper asserts, "factors of instability still exist" in the region, like the potential for crisis or conflict in the Korean Peninsula, tension between India and Pakistan, instability in the new Central Asian States, and the potential for foreign terrorist collusion with domestic separatist groups such as the East Turkistan Independence Movement, it said.

At present, according to a variety of official and semi-official publications, China views US as the only country that poses a real military threat to it and that can impose effective sanctions against it.